REASONS FOR JUDGMENT
1 These proceedings are an appeal and cross-appeal brought against the decision of Master Macready given on Wednesday 28 October 1998. The appeal is brought by the plaintiffs, Judith Olga Joye and Christopher Ronald Edward Joye, the second cross-defendant, Ian Edward Joye ("Joye") and the third cross-defendant, Robert Eric Horsell ("Horsell"). The cross-appeal is brought by the second and third defendants, David Bradley and Susan Bradley ("the Bradleys").
2 The proceedings before the Master were also in the nature of appeals from a decision given by a Registrar on 20 May 1998. The Registrar had made orders in respect of a substantial number of notices to produce and subpoenas which had been issued in these proceedings. Notices of motion had been brought by the present appellants and cross-appellants seeking the setting aside of a number of decisions of the Registrar. The Master made several orders in respect of these notices of motion. The current appeals before me relate to some only of those orders. In dealing with these appeals, it is necessary, at this stage, to make some reference to the dispute between the parties and the pleadings in the case.
3 The plaintiffs are the wife and son, respectively, of Joye. At all relevant times Joye was an accountant and company promoter. Horsell was employed, as an accountant and company secretary in a number of companies controlled by Joye. The third defendant, Susan Bradley, is the sister of Joye and the wife of the second defendant, David Bradley.
4 Central to the dispute between the parties is a trust referred to as "the Susan trust". Despite its importance, there is, apparently, no document, such as a trust deed, evidencing its terms. In the pleadings it is the subject of major dispute, the plaintiffs alleging that it was established by Horsell on the instructions of Joye in 1983 for the benefit of the plaintiffs, while the Bradleys allege, in the cross-claim, that it was established in 1977 for the benefit of Susan Bradley and her children.
5 It is common ground, that since 1983, the trustee of the Susan trust has been a company known as Rehuxo Pty Ltd ("Rehuxo"). There is also no dispute that from 1983 until 1997 the Bradleys were the only directors and shareholders of Rehuxo and that Horsell was the company secretary from 1983 until March 1993. It is asserted by Joye that the Bradleys were not intended to have any role in relation to Rehuxo other than to act in accordance with his directions.
6 It is asserted by the plaintiffs that Joye obtained from the Bradleys signed transfers in blank of their shares in Rehuxo and also signed letters of resignation of their directorships. These were obtained and kept by Horsell on Joye's behalf to ensure that the Bradleys complied with his directions in relation to Rehuxo.
7 The Bradleys deny that the documents were furnished for this specific purpose. They assert in their cross-claim that the documents were provided solely to enable Joye to undertake on their behalf, from time to time, dealings in company shares other than Rehuxo. They allege that Joye acted as their adviser in relation to financial matters, that he had fiduciary obligations to them, and that his attempted use of these documents to remove them from the control of Rehuxo was a breach of those fiduciary obligations.
8 In 1997, the parties then being in dispute, Joye arranged for the transfers to be completed by the insertion of the plaintiffs as transferees. The transfers so completed were forwarded to Rehuxo for registration. Registration was refused. Accordingly, the plaintiffs seek in these proceedings orders that the documents be registered. They also seek declarations that resolutions passed for the appointment of new directors are valid and that assets held by Rehuxo are held on trust for the plaintiffs.
9 Allegations are also made that during the period of their directorship, the Bradleys, in breach of their fiduciary duties, used funds in Rehuxo for their own benefit. Equitable compensation is sought in respect of these alleged breaches.
10 The Bradleys, for their part, deny the alleged breaches and assert, by way of cross-claim, that the Susan trust was established for the benefit of Susan Bradley and her children and that they are entitled to remain as directors and shareholders of Rehuxo. They allege that Joye and Horsell have dealt improperly since 1983 with the assets of the trust without their knowledge or consent. In particular they allege that shares in other companies held in trust by Rehuxo, or on Rehuxo's behalf, have been transferred by using transfer documents irregularly executed by Horsell at the direction of Joye and without the authority of Rehuxo. They allege, in effect, that without their knowledge or consent, Joye has used Rehuxo and its assets for his own purposes from 1983 onwards and, in particular, at the time when it was sought to register transfers in favour of the plaintiffs, that he was seeking to utilise a portion of the trust assets for the purpose of a settlement with his wife, Judith, in matrimonial proceedings, resulting from the break up of their marriage in May 1994.
11 Joye, at all relevant times, used as his stockbroker, County Natwest Securities Australia Ltd ("County"). That company had a nominee company used in its business on its clients' behalf. This company was Bowyang Nominees Pty Ltd ("Bowyang"), which is the fourth defendant in these proceedings.
12 It is convenient to refer, also, at this stage, to the company, Asian Properties Ltd ("APL"). This company is listed in New Zealand. It was formerly called Coronet Far East Ltd and was a company in the Coronet group of companies in which Joye had substantial interests and which, apparently, he controlled. From time to time shares were held by Bowyang in trust for Rehuxo and the Susan trust at the direction of Joye and Horsell.
13 Prior to September 1997, the principal asset of the Susan trust was a shareholding of 3.15 million shares in APL. In that month a capital reduction was undertaken which resulted in the Susan trust's principal asset being the proceeds of the reduction. These amounted to approximately $3.8 million.
14 The pleadings in the matter are lengthy and complex. They clearly raise issues as to the identity of the beneficiaries in, and the terms of, the Susan trust. Issues are also raised as to whether Joye, through Horsell, caused shares to be removed from the assets of the trust and used for other purposes without the knowledge and consent of the Bradleys as the directors and shareholders of Rehuxo. There is also a related but distinct issue as to Joye, by way of unauthorised dealings with shares held by Bowyang as nominee for Rehuxo as trustee of the trust, caused such shares to be diverted to his wife, the first plaintiff, in part fulfilment of the terms of the divorce settlement.
15 There is also a dispute as to whether movements of assets in and out of the Susan trust occurred without the knowledge and consent of the Bradleys, in circumstances where they seek indemnity from Joye and Horsell, should it be asserted that these dealings involved any breach of fiduciary obligations, on the part of the Bradleys as directors of Rehuxo.
16 Against this background I turn to consider the notices of motion, the subject of the Master's decision and of this appeal.
17 It is convenient to consider, in the first place, notices of motion issued on behalf of Joye seeking to set aside a notice to produce served by the Bradleys on Bowyang and a subpoena in identical terms served upon County. The relevant notices of motion were upheld by both the Registrar and the Master. Both the notice to produce and the subpoena were ultimately set aside as being too wide. There were, however, two preliminary issues for decision. The first was whether the notice to produce and subpoena were issued in breach of Pt 23 r 3 of the Supreme Court Rules. The second was whether Joye had standing to seek the setting aside of the notice to produce and the subpeona.
18 Both the Registrar and the Master found that Pt 23 r 3 did not preclude the issuing of the notice to produce and the subpoena. Each, also, found that Joye had standing to bring the notices of motion. Both these questions were raised again in the appeal.
19 As to the first I am satisfied that the Registrar and the Master were correct in holding that Pt 23 r 3 did not have the operation contended for. It was asserted that since the proceedings had been commenced after 1 October 1996, Pt 23 r 3 applied and required that the process should seek the production of specified documents clearly identified and also that the number of such documents should not exceed fifty. Pt 23 introduced a new regime for discovery. However, no alteration was made to Pt 36 r 16 pursuant to which the notice to produce was issued.
20 The Master dealt with the question as follows :
"Part 36 Rule 16 is directed a different matter, namely, the use of the equivalent of a subpoena where a party requires production of documents at a trial or, with leave of Court, on any earlier day before some person appointed. The rule involves the Court in the process whereas the production under Part 23 is merely inter-parties' production. In the present case the Notice to Produce is in accordance with is (sic) Form 45 which form is said to be for the purposes of Part 36 Rule 16.
There may well be force in the submission that the use of the Notice to Produce procedure provided for in Part 36 Rule 16 might lead to an abuse of the procedures in Part 23. However, on the rules as they presently stand, they are different procedures and there was no change to Part 36 Rule 16 when the new provisions of Part 23 were introduced. It seems to me that this is more a matter for consideration by the Rule Committee if it appears that Part 36 Rule 16 is becoming the subject of abuse."
21 I consider that the Master's reasoning is correct. Accordingly, the notice to produce should not be set aside on this ground. I should add that the discovery procedure has not been used in these proceedings. It appears that the notice to produce procedure was utilised instead, on the basis that the parties accepted that this would lead to a more expeditious disposal of the proceedings. It seems to have been accepted that arguments based upon the inappropriateness of using a notice to effect a form of discovery would not be relied upon.
22 On the question of Joye's standing to seek the setting aside of the notice to produce and the subpoena, it may be noted that neither Bowyang, nor County, sought to set aside the notice or the subpeona. I am advised that Bowyang has produced to the Court all documents sought in the notice; likewise County. Neither has claimed that the process is oppressive to them, nor that they have been unable to ascertain, from the terms of the notice to produce and the subpoena, the documents which they are required to produce. However, it was held by both the Registrar and the Master that Joye had standing to seek the setting aside of the notice and the subpoena; this was, apparently, on the basis that the terms of those documents were too wide in that they required the production of documents irrelevant to the proceedings in that, although they were not necessarily transactions by him or on his behalf, they were not necessarily transactions involving Rehuxo.
23 The relevant rule relating to the setting aside of subpoenas is Pt 37 r 8. It provides as follows:
"The Court may, of its own motion or on the motion of any person having a sufficient interest, set aside the subpoena wholly or in part."
24 This rule was considered by McLelland J in Compsyd Pty Ltd v Streamline Travel Service Pty Ltd (1987) 10 NSWLR 648 (at 649) where his Honour said:
"That rule, by its terms, does not confine standing to make such an application to the person to whom the subpoena is directed; all that is required is that the moving party have a sufficient interest. On the other hand, I do not think that the mere fact that the moving party is a party to the proceedings necessarily establishes a sufficient interest in having the subpoena set aside. It would all depend on what interest existed, in fact, in the moving party in relation to the documents which the subpoena required to be produced. If, for instance, the documents were documents in which the moving party had a proprietary interest or if the documents contained information which the moving party claimed to be confidential to it, then, in my view, either of those situations would provide a sufficient interest to justify an application to set aside the subpoena. Another example is the very situation illustrated by the case R v Lewes Justices where the Crown, obviously, had a sufficient interest in seeking to set aside a subpoena addressed to someone else on the basis of public interest privilege in the contents of the documents sought to be produced. So I do not think that this application can be disposed of on the ground of standing without an examination of the connection, if any, between the documents sought to be required to be produced by the subpoenas in question on the one hand, and the defendants on the other."
25 I agree with the Master that these principles are applicable to a situation where a notice to produce is served on a party to the litigation by another party and a third party to the same litigation seeks to set it aside. A notice to produce between parties operates as a subpoena and the same principles should apply to it. I also agree that the fact that the documents have already been produced to the Court and are in the Court's custody should not preclude the bringing of this application prior to access being granted.
26 Is it appropriate, however, that standing be accorded to Joye simply on the basis that it is asserted, by way of submission, that the notice to produce and subpoena relate to, in part, documents which he asserts can have no relevance to the issues in the proceedings? It is to be noted that Joye has not provided any evidence as to the nature of the documents asserted to be irrelevant nor as to his "interest" in their not being produced to the Court. Although the question of proprietary interest or confidentiality referred to by McLelland J are, no doubt, not exhaustive as heads of "interest", they would be bases upon which Joye could assert a sufficient interest to have the process set aside. He has provided no evidence to this effect. Moreover, the assertion of irrelevance appears to me to be one that can only be satisfactorily determined by a consideration of particular documents in respect of which the claim is made. This appears to be a matter which falls for determination at a later stage. Nor has any attempt been made by Joye to separate out documents, the production of which would affect some "interest" of his, which would militate against their production to the Court. In my view, Joye has not demonstrated standing to seek to set aside the notice to produce or the subpoena.
27 Should I be wrong in this, I should add that I am also of the view that the terms of the notice to produce and the subpoena are not too wide. Each document requires production of the following:
"1. All records, however compiled, recorded or stored recording or relating to:
(a) the purchase, sale, transfer or holding of shares in Asian Properties Limited (formerly Coronet Far East Limited) ("the Company") by, to or from Bowyang Nominees Pty Limited;